Annual report pursuant to Section 13 and 15(d)

Mineral Properties

v3.22.0.1
Mineral Properties
12 Months Ended
Dec. 31, 2021
Mineral Properties  
7. Mineral Properties

7.

Mineral Properties

 

 

 

The Company’s mineral properties consist of the following:

 

Mineral Properties

 

Lost Creek

Property

 

 

Pathfinder

Mines

 

 

Other U.S.

Properties

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

12,644

 

 

 

19,964

 

 

 

13,197

 

 

 

45,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition costs

 

 

-

 

 

 

-

 

 

 

8

 

 

 

8

 

Change in estimated reclamation costs

 

 

125

 

 

 

(114 )

 

 

-

 

 

 

11

 

Property write-offs

 

 

16

 

 

 

-

 

 

 

(27 )

 

 

(11 )

Depletion and amortization

 

 

(2,601 )

 

 

-

 

 

 

-

 

 

 

(2,601 )

December 31, 2019

 

 

10,184

 

 

 

19,850

 

 

 

13,178

 

 

 

43,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in estimated reclamation costs

 

 

(1,463 )

 

 

(120 )

 

 

-

 

 

 

(1,583 )

Depletion and amortization

 

 

(2,445 )

 

 

-

 

 

 

-

 

 

 

(2,445 )

December 31, 2020

 

 

6,276

 

 

 

19,730

 

 

 

13,178

 

 

 

39,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassify assets held for sale (note 4)

 

 

-

 

 

 

(1,536 )

 

 

-

 

 

 

(1,536 )

Change in estimated reclamation costs

 

 

296

 

 

 

(832 )

 

 

-

 

 

 

(536 )

Depletion and amortization

 

 

(2,045 )

 

 

-

 

 

 

-

 

 

 

(2,045 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

4,527

 

 

 

17,362

 

 

 

13,178

 

 

 

35,067

 

 

 

United States

 

Lost Creek Property

 

The Company acquired certain Wyoming properties in 2005 when Ur-Energy USA Inc. purchased 100% of NFU Wyoming, LLC. Assets acquired in this transaction include the Lost Creek Project, other Wyoming properties and development databases. NFU Wyoming, LLC was acquired for aggregate consideration of $20 million plus interest. Since 2005, the Company has increased its holdings adjacent to the initial Lost Creek acquisition through staking additional claims and making additional property purchases and leases.

 

There is a royalty on each of the State of Wyoming sections under lease at the Lost Creek, LC West and EN Projects, as required by law.  We are not recovering U3O8 within the State section under lease at Lost Creek and are therefore not subject to royalty payments currently. Other royalties exist on certain mining claims at the LC South, LC East and EN Projects. There are no royalties on the mining claims in the Lost Creek, LC North, or LC West Projects.

 

Pathfinder Mines Corporation

 

The Company acquired additional Wyoming properties when Ur-Energy USA Inc. closed a Share Purchase Agreement (“SPA”) with an AREVA Mining affiliate in 2013. Under the terms of the SPA, the Company purchased Pathfinder Mines Corporation (“Pathfinder”). Assets acquired in this transaction include the Shirley Basin mine, portions of the Lucky Mc mine, and development databases. Pathfinder was acquired for aggregate consideration of $6.7 million, the assumption of $5.7 million in estimated asset reclamation obligations, and other consideration.

 

Other U.S. properties

 

Other U.S. properties include the acquisition costs of several prospective mineralized properties, which the Company continues to maintain through claim payments, lease payments, insurance, and other holding costs in anticipation of future exploration efforts.

 

Impairment testing

 

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Management applies significant judgement to assess mineral properties and capital assets for impairment indicators that could give rise to the requirement to conduct a formal impairment test. Circumstances that could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; significant changes in expected capital, operating, or reclamation costs; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life. Recoverability of these assets is measured by comparison of the carrying amounts to the future undiscounted net cash flows expected to be generated by the assets. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.  Management did not identify impairment indicators that would require a formal impairment test.

  

Lost Creek has been the Company’s sole source for the uranium concentrates sold to generate sales revenues since 2013. The economic viability of the Company’s mining activities, including the expected duration and profitability of Lost Creek and of any future ISR mines, such as Shirley Basin, have many risks and uncertainties. These include, but are not limited to: (i) a significant, prolonged decrease in the market price of uranium; (ii) difficulty in marketing and/or selling uranium concentrates; (iii) significantly higher than expected capital costs to construct the mine and/or processing plant; (iv) significantly higher than expected extraction costs; (v) significantly lower than expected uranium extraction; (vi) significant delays, reductions or stoppages of uranium extraction activities; and (vii) the introduction of significantly more stringent regulatory laws and regulations. Our mining activities may change because of any one or more of these risks and uncertainties and there is no assurance that any mineral deposit from which we extract uranium or other minerals from will result in profitable mining activities.